Daos.World: The MEME circle is setting off another wave of DAO fund craze

Organized by: Yuliya, PANews

After the DAO fundraising platform Daos.fun launched by ai16z became popular, Daos.World, a so-called innovative DAO fund launch platform, has recently attracted widespread attention. The platform is deployed in both the Base and Solana (daos.fun) ecosystems and creates a new paradigm for decentralized investment management through its operating model and mechanism. This article will analyze the characteristics, potential and risks of this emerging platform from multiple dimensions such as platform architecture, operating mechanism, and participation methods.

Platform core architecture

Daos.World adopts a three-tier architecture system:

• Fund management level : The platform implements fund custody through smart contracts to ensure fund security and operational transparency. All funds are managed by smart contracts to ensure that assets are not subject to centralized control.
• Token economic level : The platform issued a total of 1.1 billion ERC20 tokens, of which 1 billion was allocated to fundraising participants and 100 million was used to establish the Uniswap V3 liquidity pool, building a complete token ecosystem. The price of the liquidity pool has a lower limit protection to ensure that the value of the assets in the pool will not be lower than the amount of ETH raised, providing basic protection for investors.
• Governance level : The platform introduces a fund expiration mechanism. When the fund expires, all trading activities will be suspended, and the assets in the fund pool will be distributed to investors according to the token holding ratio. At the same time, fund managers have flexible management rights and can extend the maturity date of the fund to ensure that investors' rights and interests are protected under specific circumstances.

Operating mechanism

The operation process of the platform is designed to be simple and efficient, and is mainly divided into the following steps:

1. Fundraising and fund management : ETH is raised through pre-sale as the initial capital of the fund. All funds enter the fund pool controlled by the DAO manager. The manager has full autonomy and can conduct transactions and investment operations according to market conditions.

2. Liquidity pool design : After Uniswap V3 is launched, a unilateral liquidity pool design is adopted, that is, the liquidity pool only contains fund tokens to ensure the effectiveness of the price discovery mechanism. Trading of tokens occurs through this liquidity pool, and the platform charges a 1% trading fee, of which 0.4% is allocated to the fund manager and 0.6% is owned by the platform. The fund’s trading activity affects the “real” price of the token, helping traders make more informed investment decisions.

3. Transaction fees and incentive mechanism : The fund manager receives a 0.4% handling fee from the token trading volume, and the platform charges 0.6%. In addition, the fund manager may receive an additional share of the profits at maturity, depending on the performance of the fund.

4. Liquidity pool lower limit protection : The liquidity pool is designed with price lower limit protection to ensure that the total asset value in the pool will not be lower than the initial amount of ETH raised, avoiding the serious shrinkage of assets caused by market fluctuations.

How to participate

The platform has designed differentiated revenue plans for different types of participants:

• Fund Manager : In addition to receiving income from transaction fees, the fund manager may also receive additional income sharing when the fund matures.
• Early investors : Obtain lower-risk investment opportunities through pre-sale. Pre-sale participants can obtain corresponding token shares based on the amount of ETH raised. At the same time, investors can choose to participate in liquidity provision and obtain additional income.
• Liquidity Provider (LP) : Due to the small initial liquidity of the platform, Liquidity Provider (LP) may obtain considerable annualized returns, and the annualized return may even exceed 1000%. However, liquidity providers need to pay attention to the risks brought by market fluctuations, which may affect the trading timing and income of the liquidity pool.

technological innovation

From a technical perspective, the platform uses smart contracts for fund custody. Fund managers perform investment operations through the onlyOwner execute() function and can call other smart contracts to implement DeFi strategies. Uniswap V3's liquid NFT remains locked until the fund expires, ensuring liquidity stability. As a security mechanism in the initial stage of the platform, the emergency exit function can be triggered when a vulnerability is discovered during the fundraising period to prevent the loss of funds. Once the pre-sale is over and the tokens are listed online, the platform will not be able to intervene in the flow of funds, which requires the platform to improve the security mechanism after further stabilization.

The platform also supports fund managers to call various smart contracts on the blockchain according to market conditions, providing broad space for the implementation of DeFi strategies. This includes but is not limited to leverage trading, cross-protocol arbitrage, income farming and other strategies, which expands the possibilities and flexibility of investment, allowing fund managers to quickly adjust investment strategies according to market changes and improve investment efficiency.

Risks and Outlook

Although the platform shows good development prospects, investors still need to be wary of multiple risk factors:

• Risks of the Fund Manager’s Investment Decisions : The Fund Manager’s investment decisions may involve greater risks, especially when selecting immature or underperforming assets. For example, if a fund manager invests funds in high-risk assets such as Meme coins that have fallen sharply, it may cause the fund's basic value to return to zero and the tokens to depreciate.
• Potential technical risks of smart contracts : Although the smart contracts of the platform have been audited, they may still have unknown vulnerabilities or technical flaws, and investors need to be cautious when participating.
• Liquidity risk caused by market fluctuations : Due to the low initial liquidity of the platform, market fluctuations may have a greater impact on the price and trading timing of tokens. Liquidity providers (LPs) need to bear the risks caused by market fluctuations.

Despite this, the platform has effectively solved many problems faced by traditional Meme coins through innovative mechanisms, especially in ensuring basic value and preventing online sniping. In the future, with the further improvement of the platform and the expansion of the ecosystem, it is expected to provide more mature solutions for decentralized fund management.

Emergency exit function

The smart contract of the platform includes an emergency exit function , which takes effect during the fundraising period and is used to protect funds when contract vulnerabilities or other abnormalities are discovered. This mechanism ensures that investors can exit safely when problems arise, but it should be noted that this function will no longer be applicable after the pre-sale ends, so investors need to pay attention to the security of the platform during the validity period of the contract. As the platform matures and is further developed, this function may be gradually improved in the future to improve overall security.

Summarize

Daos.World represents an innovative attempt at decentralized fund management, achieving a balance of efficiency, security and flexibility through a carefully designed mechanism. The platform provides cryptocurrency investors with a variety of profit opportunities through its unique token economy, flexible fund management and diversified income mechanisms. However, investors should fully understand the operating mechanism of the platform, weigh various risk factors, and invest rationally before participating.

Original text: Amir Ormu , AzFlin , VNekriach